Rise Gold Corp. 10-K

Item 1. Business DESCRIPTION OF BUSINESS We are a mineral exploration company that was incorporated in the state of Nevada in 2007. Our primary asset is our interest in the Idaho-Maryland Gold Mine property (the "I-M Mine Property"), which is a major past producing high-grade property near Grass Valley, California, United States, which we own outright through our wholly owned Nevada subsidiary, Rise Grass Valley Inc. ("Rise Grass Valley"). Our common stock is currently listed in Canada on the Canadian Securities Exchange (the "CSE") under the symbol "RISE". We are a reporting issuer in British Columbia, Alberta, and Ontario in Canada. Our common stock is also currently traded in the United States on the OTCQX Market under the symbol "RYES". We are an SEC reporting company by virtue of our class of common stock being registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Business Development Developments in our Company's business during the July 31, 2024 fiscal year and subsequent to year end, include the following: On October 21, 2024, the Company granted 1,006,750 stock options to a director of the Company. The stock options are exercisable at a price of $0.11 per share until October 21, 2029. On October 10, 2024, the Company finalized a secured loan agreement with Myrmikan Gold Fund, LLC (the "Lender") for a $500,000 loan (the "Loan") which will be used for the Company's working capital. The Loan has a term of 4 years with an interest rate of 15% per annum with interest accruing and payable along with the principal upon maturity. The Company issued 2,882,514 share purchase warrants at an exercise price of $0.1735 with a 4 year expiry period as additional consideration for advancing the Loan. The Loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. The Loan will be secured against the assets of the Company and its subsidiary. Daniel Oliver Jr., a director of the Company (a related party), is the managing member of the Lender. Mr. Oliver disclosed his interest in the transaction and abstained from voting on the Company's resolution approving the Loan. - 4 - On September 20, 2024, the Company granted 1,006,750 stock options to the Company's President and CEO. The stock options are exercisable at a price of $0.10 per share until September 20, 2029. On September 10, 2024, the Company finalized the amended debt agreement with Eridanus Capital LLC ("Eridanus") to extend an existing loan by one year to September 4, 2025 along with a reduction in interest rate to 15% per annum for a period of 12 months (commencing September 4, 2024). The Company issued 1,700,000 share purchase warrants at an exercise price of $0.115 to Eridanus as consideration for the extension. The share purchase warrants have a 4 year expiry period from the date of issuance. Eridanus directed that 340,000 of the 1,700,000 share purchase warrants be issued to Daniel Oliver Jr., a member of Eridanus, and a director of the Company. On May 13, 2024, the Company reported that we had submitted a Writ of Mandamus to the Superior Court of California (the "Court") asking the Court to compel the Board of Supervisors of Nevada County (the "Board of Supervisors") to follow applicable law and grant recognition of the Company's vested right to operate our I-M Mine Property. The Company's position in this matter is that the Board of Supervisors' December 2023 decision to deny the Company's vested rights petition adversely infringed on our fundamental and constitutional property rights. The Company contends that the Court is compelled to use its independent judgement and consider the administrative record de novo (i.e., "afresh" or "from the beginning") and without deference to the Board of Supervisors arguments or conclusions. On May 1, 2024, the Company granted a total of 1,004,479 stock options to directors and an officer of the Company. The stock options are exercisable at a price of $0.17 per share until May 1, 2029. On April 29, 2024, the Company completed a non-brokered private placement over two tranches for gross proceeds totaling $954,253 through the issuance of 10,044,765 units in total at a price of $0.095 per unit with each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional share of common stock at an exercise price of $0.158 for a period of three years from the date of issuance. Certain directors of the Company purchased an aggregate of 5,669,478 units of the private placement for gross proceeds of $538,600. The Company paid fees of $1,995 and issued 21,000 finder's warrants where each finder's warrant entitles the holder to acquire one share at a price of $0.158 for a period of two years. The Company paid legal fees of $4,515 in connection with this financing. On February 20, 2024, the Company announced that the Board of Supervisors adopted a resolution in a public hearing on February 16, 2024, denying the Company's application for a Use Permit to allow the re-opening of the I-M Mine Property and not certifying the "FEIR". On February 6, 2024, the Company entered into a credit facility arrangement with an arm's length lender that also provides services to the Company. Pursuant to the arrangement, each month, the lender will defer and add to the loan principal an amount equal to half of the fees billed by the lender up to $1,000,000. Amounts loaned will bear interest at a rate of 12% per annum compounded annually and will be due four years from the date of the arrangement. The Company may repay any amounts owing under the credit facility at any time without penalty. In connection with the credit facility, the Company has issued 1,000,000 non-transferable share purchase warrants to the lender, with each warrant exercisable into one share of common stock of the Company at a price of $0.16 per share for a period of four years from the date of issuance. In addition, for each $100,000 loaned under the arrangement, the Company has agreed to issue to the lender 200,000 additional non-transferable warrants ("Additional Warrants"). Each Additional Warrant will be exercisable into one share of common stock of the Company at any time within a four-year period from the date of issuance at an exercise price equal to the market price of the shares of the Company on grant. - 5 - On December 13 and 14, 2023, the Board of Supervisors held a public hearing regarding the Company's Petition and the Board of Supervisors adopted a resolution rejecting the Company's vested rights petition to operate the I-M Mine Property. To view the full version of the December 14, 2023 press release, please visit https://www.risegoldcorp.com/news_items. On December 12, 2023, the Company granted a total of 707,752 stock options with a fair value of $140,624 to directors of the Company. The stock options are exercisable at a price of $0.25 per share until December 12, 2028. On December 7, 2023, the Company announced that it had completed two tranches of non-brokered private placements that total $967,957 through the sale of 5,377,541 total units at a price of $0.18 per unit with each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional share of common stock at an exercise price of $0.26 for a period of two years from the date of issuance. The Company paid fees of $6,480 and issued 36,000 finder's warrants where each finder's warrant entitles the holder to acquire one share at a price of $0.26 until November 7, 2025. On September 26, 2023, the Company granted a total of 397,780 stock options to officers and directors of the Company. The stock options are exercisable at a price of $0.26 per share until September 22, 2028. The Company appointed Joseph Mullin as President and CEO of the Company as at September 25, 2023. Ben Mossman will continue in his position as a director of the Company and serve as an advisor. The Company also appointed two new directors in Clynton Nauman on September 7, 2023, and Daniel Oliver Jr. on July 10, 2023. On September 6, 2023, the Company submitted a Petition to the County of Nevada, California (the "County") asserting its vested right to mine at the I-M Mine Property. The Company's position as demonstrated in the Petition is that mining operations on the I-M Mine Property are a vested use, protected under the California and federal Constitutions, and a use permit is not required for mining operations to continue. The Company owns the I-M Mine Property consisting of 175 acres of surface land and a 2,560 acre mineral estate (the "Vested Mine Property"), located in the County. Before the I-M Mine Property was consolidated into its current configuration in 1941, it existed as multiple historical mines and operations. For the vested right to be recognized by the County, the Company needs to demonstrate the fact that mine operations were being conducted both before and immediately after the County first required a permit to mine in 1954. The Petition and its exhibits are replete with historical evidence that mining was conducted at the I-M Mine Property prior to, during, and after 1954, when the County first required a use permit. Once vested, this right to mine endures unless it is abandoned. Abandonment only occurs if two conditions are met: (1) there is evidence of a property owner's actual intent to abandon the vested mining right; and (2) an overt act (or failure to act) demonstrating such intent. The California Supreme Court has held that a vested mining right is not abandoned merely because the mine has been inactive for periods of time, and the Court has found that cessation of use alone does not constitute abandonment of a mine. The evidence set out in the Petition establishes the various previous owners evidenced their intent to retain the vested right to mine by continuously recording mineral reservations, entering into leases, and making plans for resuming mining in the future, even when mining operations were suspended. There is no evidence that any owner of the I-M Mine Property intended to abandon the vested mining right or took an overt act demonstrating that intent (let alone both). In addition, the vested right was already confirmed in 1980 by the County. The Company is subject to the vested rights being confirmed by the County. A decision on the Petition is not discretionary, rather the Board of Supervisors must decide whether to confirm the vested rights by reviewing the historical facts in light of how the California Supreme Court has interpreted the relevant legal principles. - 6 - Plan of Operations As at July 31, 2024, the Company had a cash balance of $243,669, compared to a cash balance of $758,272 as of July 31, 2023. Our plan of operations for the next 12 months is to review litigation options in pursuit of protecting the Company's property rights under both California state and US federal laws, including asserting its 5th Amendment rights under the US Constitution and other due process rights under the 14th Amendment of the US Constitution. The Company is also asking the Court to overturn the County of Nevada's decision denying the Company's Vested Mining Rights. On May 13, 2024, the Company reported that we had submitted a Writ of Mandamus to the Superior Court of California (the "Court") asking the Court to compel the Board of Supervisors of Nevada County (the "Board of Supervisors") to follow applicable law and grant recognition of the Company's vested right to operate our I-M Mine Property. The Company's position in this matter is that the Board of Supervisors' December 2023 decision to deny the Company's vested rights petition adversely infringed on our fundamental and constitutional property rights. The Company contends that the Court is compelled to use its independent judgement and consider the administrative record de novo (i.e., "afresh" or "from the beginning") and without deference to the Board of Supervisors arguments or conclusions. Project Design The Use Permit application proposes underground mining to recommence at an average throughput of 1,000 tons per day. The existing Brunswick Shaft, which extends to ~3400 feet depth below surface, would be used as the primary rock conveyance from the I-M Mine Property. A second service shaft would be constructed by raising from underground to provide for the conveyance of personnel, materials, and equipment. Gold processing would be done by gravity and flotation to produce gravity and flotation gold concentrates. Processing equipment and operations would be fully enclosed in attractive modern buildings and numerous mature trees located on the perimeter of the Brunswick site would be retained to provide visual shielding of aboveground project facilities and operations. The Company would produce barren rock from underground tunnelling and sand tailings as part of the project which would be used for creation of approximately 58 acres of level and useable industrial zoned land for future economic development in the County. A water treatment plant and pond, using conventional processes, would ensure that groundwater pumped from the mine is treated to regulatory standards before being discharged to the local waterways. Detailed studies by professionals in the fields of civil and electrical engineering, biology, hydrology, cultural resources, traffic, air quality, human health, vibration, and sound have guided the design of the project. Approximately 300 employees would be required if the mine reaches full production. - 7 - Employees During the prior year ended July 31, 2023, and until September 23, 2023, the Company had one full-time employee, which was the former Chief Executive Officer and President, who now serves as an advisor to the Company. Our current Chief Executive Officer and President provides services pursuant to a consulting agreement, and other officers and directors provide services to us on an as-needed basis. We plan to rely on their efforts, as well as those of a number of independent consultants, to manage our operations for the foreseeable future. Government Regulations We plan to engage in mineral exploration and development activities and will accordingly be exposed to environmental risks associated with mineral exploration activity. We are the operator of the I-M Mine Property. Our exploration and development activities will be subject to extensive federal, state and local laws, regulations and permits governing protection of the environment. Among other things, our operations must comply with the provisions of the Federal Mine Safety and Health Act of 1977 as administered by the United States Department of Labor. Our plan is to conduct our operations in a way that safeguards public health and the environment. We believe that our operations comply with applicable environmental laws and regulations in all material respects. The costs associated with implementing and complying with environmental requirements can be substantial and possible future legislation and regulations could cause us to incur additional operating expenses, capital expenditures, restrictions and delays in developing or conducting operations on our properties, including the I-M Mine Property, the extent of which cannot be predicted with any certainty.